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District Court Vacates Verdict and Damages in File-Sharing Copyright Infringement Case, Grants New Trial
By Dmitriy Tishyevich - Edited by Bradley Hamburger

Capitol Records Inc. v. Thomas
D. Minn., September 24, 2008, No. 06‐1497
Order (provided by EFF)

On September 24, 2008, Chief Judge Michael Davis of the United States. District Court, District of Minnesota, issued an order in Capitol Records Inc. v. Thomas (formerly Virgin Records America, Inc. v. Thomas) vacating a jury’s October 2007 copyright infringement verdict and award of $222,000 in damages to members of the Recording Industry Association of America (“RIAA”) and granting the defendant, Jammie Thomas, a new trial. The vacated award was the first jury trial victory for the RIAA in a federal copyright infringement case against an individual since it began litigation against alleged peer-to-peer users in 2003.

In the original trial, plaintiff recording companies alleged that defendant Jammie Thomas had infringed twenty-four of their copyrighted sound recordings by downloading and making them available via the Kazaa peer-to-peer file sharing network. Judge Davis instructed the jury that the “act of making copyrighted sound recordings available for electronic distribution on a peertopeer network, without license from the copyright owners, violates the copyright owners’ exclusive right of distribution, regardless of whether actual distribution has been shown.” The jury found that Thomas had willfully infringed on all twenty-four of the plaintiff’s sound recordings, and awarded statutory damages of $9,520 per violation ($220,000 in total damages). On May 15, 2008, however, Judge Davis issued an order stating that he was contemplating granting a new trial due to the possibility that the jury instruction at issue constituted a manifest error of law. Both parties briefed the issue, and Judge Davis allowed submission of five amicus briefs.

Eric Bangeman at ArsTechnica provides a summary of the order.

Corryne McSherry of the Electronic Frontier Foundation applauds Judge Davis’ call to lower the Copyright Act’s statutory damages.

David Kravets of the Wired “Threat Level” blog notes that the decision “nullified an almost foolproof method for the RIAA,” but suggests that it simultaneously “replaced it with another” by holding that the music files downloaded by RIAA investigators can form the basis for an infringement claim.

In the present order, Judge Davis took note of the split among courts as to whether merely making copyrighted materials available was sufficient to constitute distribution under 17 U.S.C. § 106(3), which grants copyright holders, inter alia, the exclusive right to “distribute copies . . . of the copyrighted work.” He determined, however, that neither the statutory language nor the ordinary meaning of the term supported the view that distribution may occur without actual transfer. Judge Davis held that the varying use of the term “distribution” in other provisions of the Copyright Act, as well as the distinction made under the Patent Act between “distribute” and “offer to distribute,” further suggested that actual dissemination is required for distribution to occur. He also rejected the plaintiffs’ argument that “distribution” is synonymous with “publication” under the Copyright Act, noting that the legislative history on the issue was mixed, and could not at any rate override the plain meaning of the statutory language.

In addition to ruling that distribution requires an actual transfer, Judge Davis also held that a transfer may be demonstrated by dissemination to an investigator acting as an agent for a copyright owner. He noted that Eighth Circuit precedent approved the use of investigators by copyright owners and that Thomas’ actions (providing the copyrighted files for copying and placing them on a file-sharing network, rather than only assisting in the copying of works provided by investigators) constituted more substantial participation in infringement than had the actions of defendants in the other Eighth Circuit cases involving investigators.

Judge Davis concluded the opinion by inviting Congress to amend the Copyright Act to clarify issues of liability and damages in peer-to-peer file-sharing cases, particularly in light of the fact that “the damages awarded in this case are wholly disproportionate to the damages suffered by Plaintiffs.” He underscored that Thomas had not gained nor sought any profits, and suggested that the statutory damages, as presently calculated, are “certainly far greater than necessary to accomplish Congress’s goal of deterrence.”

Judge Davis’ determination that merely making a music file available in a shared file is insufficient to constitute distribution under the Copyright Act is consistent with similar findings in other district court decisions, including Atlantic Record Corp. v. Howell, 554 F. Supp. 2d 976 (D. Ariz. 2008) and London-Sire v. Does, 542 F. Supp. 2d 153 (D. Mass. 2008). At least one other district court, however, has found that an offer to distribute may be sufficient to violate a copyright owner’s distribution rights. See Elektra Entertainment Group, Inc. v. Barker, 552 F. Supp. 2d 234 (S.D.N.Y. 2008).

The upcoming Fall 2008 issue of the Harvard Journal of Law & Technology will feature a student note by John Horsfield-Bradbury focused on the “making available” issue.

Posted On Oct - 1 - 2008 Comments Off

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